Union Budget 2023: Key highlights from Finance Minister Nirmala Sitharaman’s speech

Feb 01, 2023

Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget 2023 in Parliament, at a time when India's economy faces challenges from a host of global factors, steep rise in inflation and a possible GDP growth slowdown in FY24.

"This is the first budget in Amrit kaal, it hopes to build on the foundation laid by the previous budget and the blueprint drawn for India at 100," Sitharaman said. During her budget speech, the finance minister said the focus remains on widening the scope of economic growth, boosting key areas like infrastructure and manufacturing and job creation.

Here are some of the highlights from the finance minister's budget speech.

Indian economy on right track

Finance Minister Nirmala Sitharaman said the Indian economy is on the right track and, despite challenges, it is heading towards a bright future. "Our focus on wide ranging reforms and sound policies helped us perform well in trying times. India's rising global profile is because of several accomplishments: a unique world-class digital public infrastructure, Covid vaccination drive and a proactive role in frontier areas.

Free food grain scheme under PM Garib Kalyan Anna Yojana

The finance minister said the government has implemented a scheme to supply free food grains to priority households for the next one year, under PM Gaarib Kalyan Anna Yojana. The entire expenditure of about Rs 2 lakh crore will be borne by the government, said the finance minister.

7 priorities for Budget 2023

There are seven priorities that will be the focus of the Union Budget, said the finance minister. They are inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.

Budget for Amrit Kaal

The finance minister said this budget will lay the roadmap for the Amrit Kaal, which will include technology-driven growth and a knowledge-based economy. "Our vision for the Amrit Kaal includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this 'janbhagidari' through 'sabka saath, sabka prayaas' is essential," she said.

Big boost to agriculture

As expected earlier, the finance minister made several announcements to boost the overall agricultural sector, including providing affordable solutions for challenges faced by farmers. She announced an agriculture accelerator fund to "transform" the sector.

The agricultural credit target will be increased to Rs 20 lakh crore, with focus on animal husbandry, dairy and fisheries. "We will launch a new sub-scheme with targeted investment of Rs 6,000 crore to aid activities of fishermen, fish vendors and MSMSEs," said Nirmala Sitharaman.

Health Education and Skilling

The finance minister said 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014. ICMR labs will be made available for research by public and private medical college faculty and private sector R&D teams, to encourage collaborative research and innovation.

She also announced a new programme to promote research and innovation in pharmaceuticals. The government will also encourage industry to invest in research and development in specific priority areas.

A National Digital Library for children and adolescents will be set up to facilitate the availability of quality books across geographies, languages, genres and levels and device-agnostic accessibility, said the finance minister.

Outlay for PM Awas Yojana increased

The outlay for the Pradhan Mantri Awas Yojana, an initiative by the Government of India in which affordable housing will be provided for the urban poor, is being enhanced by 66 per cent to over Rs 79,000 crore.

Big boost to capital investment

Investment and job creation continues to be the government's top priority, as outlined by the finance minister in her budget speech. She said the capital

During her budget speech, Finance Minister Nirmala Sitharaman said capital investment outlay is being increased by 33 per cent to Rs 10 lakh crore, which would be 3.3 per cent of GDP.

She also announced that the provision for 50-year interest-free loans to state governments has been extended by another year. This will be done to spur investment in infrastructure and to incentivise them for complimentary policy actions, with enhanced outlay of Rs. 1.3 lakh crore.

Railway outlay at Rs 2.40 lakh crore

The finance minister announced that the total outlay for the Indian Railway budget will be Rs 2.40 lakh crore, nine times more than the total outlay in 2013-14.

PAN to become a common identifier

For business establishments required to have a Permanent Account Number, the PAN will be used as a common identifier for all Digital Systems of specified government agencies, said the finance minister.

Fiscal Deficit Target for FY24

The fiscal deficit target for FY24 has been reduced to 5.9 per cent of the GDP, compared to 6.4 per cent for FY23. The finance minister said, "I reiterate my intention to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26."

Customs duty on certain items including cigarettes

The finance minister said a number of basic customs duty rates on goods other than textiles and agriculture should be reduced from 21 per cent to 13 per cent. As a result, there will be minor changes in the basic customs duties, cesses and surcharges on some items including toys, bicycles and automobiles. The customs duty on cigarettes has gone up once again.

"I propose to provide relief on Customs Duty on import of certain parts & inputs like camera lens & continue the concessional duty on lithium-ion cells for batteries for another year," the finance minister said.

Big changes in new income tax regime

Finance Minister Nirmala Sitharaman said the income tax rebate has been extended on income up to Rs 7 lakh, under the new income tax regime.

"introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 Lakhs. I propose changing the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs," she said.

She also proposed to make tax slabs more flexible under the new tax regime. "The new tax rates are 0 to Rs 3 lakhs - nil, Rs 3 to 6 lakhs - 5%, Rs 6 to 9 Lakhs - 10%, Rs 9 to 12 Lakhs - 15%, Rs 12 to 15 Lakhs - 20% and above 15 Lakhs - 30%, " said Finance Minister Nirmala Sitharaman.